Proactive Investors - Matterport (NASDAQ:MTTR) shares surged almost 180% after it was revealed the spatial data company is being acquired by CoStar Group Inc (NASDAQ:CSGP) to bolster its digital real estate offering.
The companies said on Monday that CoStar will acquire Materport in a cash and stock transaction valued at $5.50 per share, representing an enterprise value of $1.6 billion.
Matterport stockholders will receive $2.75 in cash and $2.75 in shares of CoStar stock for each Matterport share held.
Matterport developed the first 3D capture solution for dimensionally accurate, photorealistic virtual tours or “digital twins” for any property type and has since amassed what is considered to be the largest and most precise collection of spatial property data with 12 million-plus spaces captured across 177 countries.
CoStar operates online property marketplaces, including Apartments.com, LoopNet, CoStar, and Homes.com, all of which feature Matterport’s proprietary 3D virtual tours.
The company highlighted the value of Matterport virtual tours, noting that in March 2024 consumers spent more than 20% more time viewing an apartment listing on Apartments.com when these tours were available.
CoStar CEO Andy Florance said there was no better way to experience a space remotely than with Matterport.
“The world has changed and today a Matterport is the new open house or property tour. People now select their next home, apartment, office, store, hotel, or warehouse on their mobile device often without ever visiting the property,” Florance said.
“CoStar Group intends to support and invest in research and development opportunities to further develop Matterport’s spatial technology, including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative artificial intelligence to imagine and reimagine physical spaces.”
Matterport CEO RJ Pittman said this milestone acknowledges Matterport’s accomplishments in 3D digital twin technology and AI-driven property intelligence.
“With CoStar Group's expansive reach and scale in property research and analytics and our joint commitment to innovation, we believe that this powerful combination will transform how properties are marketed, sold, and managed worldwide,” Pittman said.
“Importantly, it offers Matterport's stockholders the opportunity to participate in the value creation and future growth prospects of our combined efforts.”
Analysts at Wedbush raised their price target on Matterport to $5.50 on the news. They repeated their ‘Buy’ rating.
“We believe this was a solid move for both entities as both mission statements are closely aligned in terms of digitizing the world’s real estate with the acquisition expected to be completed this year,” they wrote.
“We do not expect any other bidders or regulatory issues.”
The acquisition is expected to close during 2024 pending approval of Matterport stockholders and the satisfaction of other customary closing conditions.
Matterport shares traded up 179% at US$4.86 while CoStar shares added 0.4% at $84.57 at noon on Monday.